Britain will continue to expand trade relations with Iran despite Donald Trump’s decision to re-impose sanctions on the state, Downing Street has said.

The Government “regrets” the US president’s move to restore restrictions on Tehran that were lifted when it signed up to a nuclear deal in 2015, and believes the agreement makes the world a safer place, No 10 insisted.

It encouraged UK firms to “take advantage” of commercial opportunities with Iran and said work is being carried out on protecting businesses from the impact of secondary sanctions.

“We regret the re-imposition of sanctions by the US,” the Prime Minister’s official spokesman said.

“We continue to believe that the Iran nuclear deal makes the world a safer place and our position remains that as long as Iran continues to meet its obligations under the deal by respecting strict limits on its nuclear activity we will be committed to it too.

“We continue to fully support expanding our trade relationship with Iran and encourage UK businesses to take advantage of the commercial opportunities that arise.”

Theresa May, France’s Emmanuel Macron and Germany’s Angela Merkel said in May that they remained firmly committed to the Iran nuclear deal after Mr Trump announced he was pulling the US out of the international accord.

The Prime Minister told the US president the UK was sticking with the agreement in a telephone call at the time.

Under the Joint Comprehensive Plan of Action, Iran agreed to scale back key elements of its nuclear energy programme associated with the development of a nuclear weapon in return for the easing of economic sanctions.

Mr Trump has always insisted the deal that was struck was not tough enough on Iran.

The sanctions will hit Iran’s oil industry, and President Hassan Rouhani has said the move plunges the country into an economic war.

He said: “We are in the war situation. We are in the economic war situation. We are confronting a bullying enemy. We have to stand to win.”

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